Answer to Question #69263 in Macroeconomics for ibn hassan

Question

3.1 Consolidated government expenditure is expected to grow by 7.1 per cent over the medium term, reaching
R1.69 trillion in 2018/19. At this rate, spending growth will outpace inflation by 0.8 per cent. (Source:
www.treasury.gov.za)
3.1.1 Describe the main instruments of fiscal policy that are available to government. (5)
3.1.2 Drawing from the statement above, how can government finance increased expenditure? (5)
3.1.3 What are the possible negative effects of 3.1.2 above? (5)
3.2 With the aid of a properly labelled diagram, explain the three main characteristics of the consumption
function. (10)
3.3 With the aid of a fully labelled diagram explain the general business cycle in the South African economy. (5)